The rate of change in the business world is increasing exponentially. Disruptive companies are upending whole industries by introducing new technologies and business models quickly copied and adopted by their competitors. As a result, businesses must continuously reinvent themselves to stay ahead of the curve, exposing themselves to potential risks as they venture into uncharted territory.
70% of companies are either in the process or have already achieved a digital transformation ... [+]
This is particularly true in the technology sector, where new companies constantly emerge and change the landscape. For example, Uber disrupted the taxi industry by introducing a new business model that other companies quickly copied. Airbnb did the same thing to the hotel industry. And Google disrupted the advertising industry with its unique approach to online marketing.
As these examples illustrate, businesses must constantly innovate and evolve if they want to stay ahead of the competition. They must be open to new ideas and willing to experiment with new technologies and business models. And they need to be able to move quickly, lest they be left behind.
As a result, companies are looking for ways to become more agile and adaptable: 70% of companies are either in the process or have already achieved a digital transformation strategy, according to a study. Moreover, an overwhelming majority of businesses recognize the potential for digital disruption, yet only a little over half are ready to face it head-on. With 87% expecting challenges from this transformation, just 44% have taken preparatory steps to meet them.
Clearly, therefore, there are significant benefits to be gained from digitizing. But how can a business ensure success in its digital transformation efforts?
OpenWay’s recently published white paper proposes four levers leaders can use to increase the chances of success when delivering complex digital transformation projects in fast-changing environments. These steps, according to Maria Vinogradova, head of strategy and market intelligence at OpenWay, have already helped the company’s clients—including Finaro—to increase the success rates of their transformation initiatives. “We have seen firsthand how following these steps can make a difference,” Vinogradova said in an email.
1. Purpose
The first step is to define the purpose of the transformation in terms of business objectives and how they will be achieved. This purpose should be aligned with the organization’s strategy and should be something all employees can rally behind. For example, when Amazon decided to enter the cloud computing market, its purpose was to become “the most customer-centric company in the world”. This purpose inspired and guided Amazon as it embarked on a complex digital transformation journey to build AWS, its cloud computing platform.
2. Structure
The second step is to ensure that their organizations are structured in a way that allows them to be agile and adaptable, which means creating smaller, more nimble teams that are empowered to make decisions and move quickly. It also means breaking down silos and promoting collaboration across functions. For example, when Google embarked on its digital transformation journey, it restructured itself into Alphabet, a collection of smaller companies focused on a specific area. This allowed each company to move more quickly and be more agile in response to market changes.
3. Process
The third step is to streamline processes to make them more agile and efficient. This means eliminating unnecessary steps and bureaucracy that can slow decision-making and execution. For example, when Walmart embarked on its digital transformation journey, it streamlined its supply chain and logistics processes to allow for faster delivery of products to customers. Doing so required the company to invest in new technologies, such as data analytics and artificial intelligence (AI), to help it make better decisions about inventory levels and product placement, which infers the importance of data in the digital transformation process.
One important lesson learned by Walmart was the necessity to adapt ‘in flight’ as the company was going through its digital transformation, it had to be open to making changes to its plans based on feedback and results. This type of agility, which is defined by MIT’s entrepreneur mentor in residence, Terence Mauri, as “constant adaptability”, is critical for any organization embarking on a digital transformation journey. Mauri’s view is shared by Entrepreneur columnist Ferrat Destine. “Organizations need to be willing to quickly pivot and try something different as soon as they find out one approach isn’t working,” Destine said in an interview. “You can waste time and money if you don’t adjust your strategy based on what the data tells you.”
4. People
The final step is to invest in people—hiring the right talent and providing them with the training and development they need to be successful. This also means creating a culture that values innovation and creativity. “Employers that are willing to engage in real, two-way conversations with their workforce—like what employees need to be successful, as well as goals and constraints from leadership—can achieve not just a flexible work detente, but potentially a more engaged workforce,” said New York Times best-selling author Tasha Eurich, in an interview.
Evidently, when people are your most valuable asset, it’s crucial to invest in them accordingly. The takeaway is that if you want to transform your business, you must invest in the right people. Hire talented individuals who can help you achieve your goals and provide them with the training and development they need to be successful. Creating a culture that values innovation and creativity is also critical. Only by investing in people can you hope to achieve real and lasting transformation.
So there you have it: a four-step guide to business transformation. Keep these in mind as you work to improve your business. With the right approach, you can increase your chances of success when delivering complex digital transformation projects in fast-changing environments.
But remember, while purpose, structure, process and people are critical, the technology that enables these elements is also necessary—it needs to be fit for purpose, it needs to support the new ways of working, and it needs to be able to scale. So think about how you can use technology to enable your business transformation in each of these areas, and you’ll be well on your way to success.
